Here are key things to know about the post office Public Provident Fund (PPF) account:

Interest rates

The post office PPF account offers an interest rate of 8 per cent per annum, compounded on a yearly basis, according to the India Post website.

How to open post office PPF account

A post office PPF account can be opened by any individual with cash or cheque. In case of cheque, the date of realisation of cheque in the government account should be date of opening of account, according to India Post.

Minimum contribution required/maximum allowed

The PPF account can be opened by an individual with Rs 100 subject to minimum and maximum limits of Rs. 500 and Rs. 1,50,000 in a financial year respectively. The subscriber should not deposit more than Rs. 1,50,000 per annum as the excess amount neither earns any interest nor is eligible for rebate under Income Tax Act, according to the India Post website. The amount can be deposited in lump sum or in a maximum of 12 instalments per year.

Maturity period

The post office PPF account matures in a period of 15 years. Thereafter, on application by the subscriber, it can be extended for one or more blocks of five years each.

Tax Benefits

Deposits in the post office PPF account qualify for income tax deduction under Section 80C of the Income Tax Act. The government has in its Interim Budget 2019-20 proposed to increase the limit for tax deduction at source (TDS) on interest income earned on post office deposits from Rs 10,000 to Rs 40,000 per annum. The proposed change in TDS rules will come into effect from April 1, 2019.

Premature withdrawal

A withdrawal is permissible every year from seventh financial year from the year of opening of the post office PPF account, according to India Post. That means the customer is allowed to withdraw from the account after 7 years of operating the account.